Combine 1-1/2 cups flour, sugar, undissolved yeast and salt in large mixer bowl.
Heat milk, water and 1/3 cup butter until very warm (120° to 130°F); butter does not need to melt.
Add to flour mixture; beat 2 minutes at medium speed of electric mixer, scraping bowl occasionally.
Add eggs and 1/2 cup flour; beat 2 minutes at high speed, scraping bowl occasionally.
Stir in remaining flour to make stiff batter; grease top. Cover tightly with plastic wrap; refrigerate 2 hours or up to 2 days.
Remove dough from refrigerator and punch dough down.
Remove dough to lightly floured surface; divide in half. Set aside 1 half. Roll remaining dough to 16x10-inch rectangle.
Melt remaining 1/4 cup butter; brush 2 tablespoons over dough.
Sprinkle evenly with half of cinnamon filling.
Beginning at long end, roll up tightly as for jelly roll; pinch seam to seal. With sharp knife, cut roll into 12 equal pieces.
On lower third of large greased baking sheet, arrange 4 rolls, cut sides up, in a row with edges touching.
Form tree shape with additional rows of rolls - 3 rolls in second row, 2 rolls in third row, 1 roll in fourth row, and 2 for the trunk. Repeat with remaining dough, butter and filling. Cover; let rise in warm place until doubled in size, about 30 to 45 minutes.
Bake at 375°F for 15 to 20 minutes or until done, switching positions of sheets halfway through baking time for even browning.
Remove from sheets; let cool on wire racks. Drizzle with Vanilla icing. Decorate "trees" with green and red candies.
Cinnamon Filling: Combine sugar and cinnamon in a small bowl. Stir well.
Vanilla Icing: Combine powdered sugar, milk and vanilla in a small bowl. Stir until smooth.